Question
In: Accounting
QUESTION 22 Presented below is information related to Sheridan Manufacturing Company as of December 31, 2021:...
QUESTION 22
Presented below is information related to Sheridan Manufacturing Company as of December 31, 2021:
Projected Benefit Obligation 1,950,000
Accumulated OCI (PSC) 860,000
Fair value of the pension plan assets 1,445,000
The pension asset/liability reported on the balance sheet at Decermber 31, 2021 is
O Pension liability of $505,000.
O Pension liability of $1,950,000.
O Pension liability of S2,810,000.
O Pension liability of $1,445,000.
Solutions
Expert Solution
The correct answer for the question is Option A - Pension liability of $505,000. This Pension liability is calculated as follows:-
Pension Liability = Projected Benefit Obligation - Fair value of the pension plan assets.
Pension Liability = $1,950,000 - $1,445,000
Pension Liability = $505,000
Based on the above calculation, the correct answer is Option A - $505,000. This amount is the underfunded projected benefit obligation. Generally, this is the amount that is shown on the Balance Sheet as a Pension Liability. This is the correct answer.
Option B is incorrect as $1,950,000 is the amount that does not consider the fair value of the pension plan assets available.
Option C is incorrect as $2,810,000 is not the correct answer per above considerations.
Option D is incorrect as $1,445,000 is the value of the pension assets.
Please let me know if you have any questions via comments and all the best :) !
ekkarill92 answered 1 year agoRelated Solutions
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Presented below is information related to equipment owned by
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Cost
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Accumulated depreciation to date
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Expected future net cash flows
7,490,000
Fair value
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Assume that Sheridan will continue to use this asset in the future.
As of December 31, 2020, the equipment has a remaining useful life
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Prepare the journal entry (if any) to record the impairment of
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Sheridan Company’s balance sheet at December 31, 2021, is presented below. Sheridan Company Balance Sheet December...
Sheridan Company’s balance sheet at December 31, 2021, is
presented below.
Sheridan Company
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December 31, 2021
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Accounts payable
$8,300
Accounts receivable
20,600
Common stock
21,900
Allowance for doubtful accounts
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Retained earnings
12,710
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Jan. 1
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payment of Betheny’s $3,600 account.
3
Sheridan wrote off as uncollectible the accounts of...
Sheridan Company’s balance sheet at December 31, 2021, is presented below. Sheridan Company Balance Sheet December...
Sheridan Company’s balance sheet at December 31, 2021, is
presented below.
Sheridan Company
Balance Sheet
December 31, 2021
Cash
$13,500
Accounts payable
$8,300
Accounts receivable
20,600
Common stock
21,900
Allowance for doubtful accounts
(860)
Retained earnings
12,710
Inventory
9,670
$42,910
$42,910
During January 2022, the following transactions occurred. Sheridan
uses the perpetual inventory method.
Jan. 1
Sheridan accepted a 4-month, 8% note from Betheny Company in
payment of Betheny’s $3,600 account.
3
Sheridan wrote off as uncollectible the accounts of...
Presented below is information related to equipment owned by a company at December 31, 2017. ...
Presented below is information related to equipment owned by a
company at December 31, 2017.
Cost
$5,600,000
Accumulated depreciation to
date
640,000
Expected future net cash
flows
4,000,000
Fair
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2,720,000
Assume that the company will continue
to use this asset in the future. As of December 31, 2017, the
equipment has a remaining useful life of 4 years.
Using the attached T-account
template:
Prepare the journal entry (if any) to record the impairment of...
Presented below is information related to Sheridan Company, owned by D. Flamont, for the month of...
Presented below is information related to Sheridan Company,
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Ending inventory per perpetual records
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Insurance expense
$12,300
Ending inventory actually on hand
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Rent expense
20,200
Cost of goods sold
209,000
Salaries expense
54,500
Freight out
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Sales returns and allowances
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Presented below is information related to equipment owned by ACtiv Company on December 31, 2018. ...
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Accumulated depreciation to
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2,500,000
Value-in-use
6,000,000
Fair value less the cost of disposal 5,400,000
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Accumulated depreciation to
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Value-in-use
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Assume that ALALI will continue to use this asset in the future.
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Prepare the journal entry (if any) to record the impairment of
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. Presented below is information related to equipment owned by ALALI Company at December 31, 2010....
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equipment owned by ALALI Company at December 31, 2010.
Cost
SAR 7,000,000
Accumulated depreciation to
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Value-in-use
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Fair value less cost of
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4,400,000
Assume that ALALI will continue to use this asset in the future.
As of December 31, 2010, the equipment has a remaining useful of 4
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Instructions
Prepare the journal entry (if any) to record the impairment of
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Presented below is information related to equipment owned by Blossom Company at December 31, 2020. Cost...
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Cost
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Accumulated depreciation to date
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Expected future net cash flows
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